IMF Staff Concludes Visit to Chad

IMF News, January 18, 2022

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Chad’s economic and financial situation and medium-term prospects have worsened due to a series of long-lasting shocks since the onset of the COVID-19 pandemic.
Real GDP in 2021 is estimated to have contracted by 1.1 percent, driven by a reduction in oil production.
Average annual inflation was contained after soaring in 2020 to 4.5 percent.
The pandemic will likely leave long-lasting scars, and the Chadian economy is projected to remain weak over the near term, before gradually rebounding in 2024, to 3.6 percent provided adequate reforms are implemented.
Identified adverse shocks include:
- the COVID-19 pandemic;
- oil price volatility and a significant deterioration in the output of the oil sector;
- security attacks; and
- climate change and food insecurity.

The IMF Executive Board approved on December 10, 2021 a new 36-month ECF arrangement in an amount of SDR 392.56 million (about US$570.75 million or 280 percent of quota), to help meet Chad’s large balance-of-payments and budgetary needs, including by catalyzing financial support from official donors.
Debt treatment under the G20 Common Framework and significant donor support are key for restoring debt sustainability and promote durable inclusive growth.
Finalization of a debt treatment with both public and private creditors by end-March will be critical.

"Public spending pressures are rising due to security and social tensions. Maintaining fiscal discipline in the runup to the parliamentary and presidential elections is critical for macroeconomic stability."
Policy priorities and recommended actions include:
- Strengthen domestic tax revenue mobilization.
- Streamline exemptions.
- Improve VAT collection.
- Control the wage bill.
- Increase social spending.
- Clear domestic arrears.
- Continue reforms in the banking sector.
The mission emphasized staying the course with the reform agenda to secure macroeconomic stability.

"Progress has been made on structural reforms and further efforts are envisaged to continue with the program reform agenda."
Structural benchmarks slated for the first half of 2022 relate to:
- tax exemptions, and
- transparency in the oil sector and in public procurement contracts.
Recent reform steps:
- Launch of a pilot program to decentralize wage bill management under the Integrated Financial Management System to improve public financial management.
- Progress in the preparation of a new national development plan and the rebasing of national accounts.
Further needs identified:
- Speed up improvement in tax revenue administration.
- Improve the business environment to support the role of the private sector in economic recovery.
"The IMF stands ready to provide technical assistance to support these critical reforms."

An IMF mission led by Edward Gemayel visited N’Djamena during January 12-18, 2022 to take stock of recent economic developments and update the macroframework prior to the finalization of the debt treatment by Chad’s main official and private creditors.
The mission was received by President Mahamat Idriss Deby, and met with:
- Mr. Tahir Hamid Nguilin, Minister of Finance and Budget;
- Mr. Issa Doubragne, Minister of Economy, Development Planning and International Cooperation;
- Mr. Mahamat Hamid Koua, Minister Secretary General of the Government;
- Mr. Idriss Ahmat Idriss, the National Director of BEAC; and other senior officials, as well as representatives of international development partners.
IMF Communications Department media relations contact:
- PRESS OFFICER: Meera Louis
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
- @IMFSpokesperson
"The IMF team would like to thank the Chadian authorities and other counterparts for their hospitality, excellent cooperation, and candid and constructive discussions."

Press Release No. 22/08, January 18, 2022, IMF.